DETROIT – Forget about fancy showrooms and free doughnuts. Car buyers now must take delivery of their new ride at home, at work or, sometimes, sitting near a dealership parking lot at a makeshift office.
"We’re trying to be sensitive to what’s going on and yet facilitate a transaction in a safe and respectful manner," said Paul Zimmermann, partner in Matick Automotive, which owns Matick Chevrolet in Redford Township, Michigan, and Matick Toyota in Macomb, Michigan, both in the Detroit metro area.
Zimmermann has sold cars for more than 20 years, yet he has been struggling to find the safest way to sell them now that Michigan Gov. Gretchen Whitmer lifted the three-week ban on new and used car sales, saying "automobile dealerships will now be allowed to open for remote sales, though showrooms must remain closed."
For some metro Detroit car dealers, it presents a predicament. They must protect the health of employees and customers while generating sales to keep revenues flowing. They are trying to work with customers, too, whether it be extending a lease, doing a trade or holding a car for a customer until showrooms can reopen.
“We’re trying to provide a living for 160 families," said Zimmermann, referring to his employees. "But we're also following the CDC guidelines to keep everyone safe. So it’s the fine line between taking care of my workers' livelihoods and health, versus protecting our customers and serving them."
As a result, whenever showrooms are allowed to reopen, the way of doing business will be forever changed for Zimmermann and other dealers.
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It had been three weeks since Zimmermann last sold a carwhen dealers got the governor's green light last week. It took him two whole days to figure out how to do it.
"I’m going to follow the letter of the law, but the order was a little vague," Zimmermann said. "It says you can deliver it in a mutually agreeable location. People said to me, 'Why don’t you just deliver it to a person’s house?' Well, I don’t want to put my team at risk if they have to deliver it to a home where someone’s been exposed. I was trying to figure out what we can and can’t do all day Friday and Saturday."
What he came up with is a portable office set up outside in the dealership parking lot and away from showroom doors. It entails a strict social-distancing dance between the buyer and a sales manager.The customers shop online and work with a remote sales representative to select a car to purchase. They make an appointment and arrive at the dealership's outdoor sales table.Zimmermann's general sales manager has all the paperwork prepared and "sign here" tabs set on the table, along with a pen. The manager stands 6 feet away.The customer then approaches the table and signs the paperwork, then steps back several feet from the table.The manager approaches the table and takes the papers, placing the vehicle's keys on the table for the customer.At this point, a vehicle "walk around" video is sent to the customer's phone to explain the car's features rather than the salesperson showing the customer how everything works in person.Or if the customer prefers a phone call from the salesperson to go over the vehicle's features as the customers sits alone in the new vehicle, that can be arranged, too.
"If we can do a dozen sales a week and set it up with six on Thursday and six on Friday, it’s safer for the customer and for team members," Zimmermann said. "Then, you only have a sales manager or two coming in to facilitate the deal."
'Brave new world'
The governor's most recent executive order for people to shelter-in-place expires April 30. At Village Ford in Dearborn, Michigan, owner Jim Seavitt said he tentatively set May 4 to reopen the dealership. His sales team is in contact with customers and will deliver a car to a home. But he says customers prefer to wait until May, which is also his preference, he said.
Seavitt shut down his sales three days ahead of the governor's March 23 order, fearing a customer or employee could bring the virus into the showroom. That meant he had to put 150 of his 188 employees on furlough. But by June 30, he said, "I will try to bring every employee back."
Seavitt usually sells about 280 new and used vehicles a month, but he expects to sell just five to 10 cars for April. Still, he's stockpiled 740 vehicles in inventory to start selling as soon as the doors can open.
But, he admits, it will be a different world.
"It’s all about what we’re going to do in this brave new world," Seavitt said. "How will customers feel about their cars? We’ll have to sanitize them and probably have documentation that they’ve been sanitized. Probably do much more home or work delivery, if they want it.”
He's ordered plastic shields for all the service advisers and cashiers to wear for protection, Seavitt said, and he has been conducting Zoom conference meetings every Friday with his leadership team to prepare for reopening.
He envisions employee desks spaced farther apart. "Ford is working on a package that they will either accommodate or make that will have sanitizers, masks and things dealers will need when they reopen. If they don’t do it, we’ll do it so that customers who want to wear masks, we’ll have one available for them.”
A Ford spokesman did not have an immediate comment on Ford's plans for its dealerships.
Seavitt said he gets dozens of emails a day from other dealers worried about reopening. From some of those emails, he also gets ideas. One is to install protective partitions at customer-facing desks in the service and parts area.
Waiting it out
Zimmermann agrees there’ll be changes. His sales managers, who sat at desks just 3 feet apart, will be farther spaced.
But, he said, “I don’t think we’re any different – from a car dealer’s perspective – than any other industry. It’s unprecedented.”
The pandemic has changed how he thinks, Zimmermann says, giving him counterintuitive sales instincts. Rather than push for sales, now he opts for restraint until the pandemic subsides.
Yet prior to the March 23 shutdown of car sales, the Detroit Three automakers and many of their dealers found creative ways to keep business moving as people hunkered down to avoid catching the coronavirus.
All three companies offered finance deals on new cars, online shopping and other services. And if it required picking up customers' cars for oil changes, repairs or delivering a new car to someone's doorstep, dealers did it.
But in the three weeks of idled car sales, revenues have plunged for Village Ford and Matick Chevrolet and Matick Toyota.
Zimmermann typically sells about 600 new and used cars a month at his Matick stores. For April, he anticipates selling 35 to 40 cars.
Service and parts have helped generate some revenue. Dealerships were permitted to continue repair work under the governor's order. Zimmermann ran his service lane, but with a small staff of about 15. Still, technicians fixed cars for front-line hospital workers and police officers.
"And we provided them with a loaner car while their vehicle was down," Zimmermann said. "I am proud that we helped those folks out.”
At Village Ford, Seavitt idled his service lane, again to protect his employees from the virus. But he did continue to sell wholesale parts. He typically sells $1 million a month in parts to other metro Detroit Ford dealers.
But he said, "from Monroe up to Port Huron, Lansing and east to Ann Arbor there were only nine Ford dealers open as of Friday." So Seavitt's sales are off 50%.
But both Zimmermann and Seavitt say they'll have plenty of inventory when sales restart.
"You could debate that we’re heading to a recession, but up to March 1st, sales were strong, we had low interest rates and gas prices were low," said Zimmermann. "There’s still a lot of liquidity in the market. I’m confident that when we’re out of this, whether it’s May 1st or June 1st, there is a lot of pent-up demand.”
(Editor's note: This story has been corrected to fix the spelling of Paul Zimmermann's name.)
Follow Jamie L. LaReau on Twitter @jlareauan.